Maruti Suzuki Has Been Fined Rs 200 Crore By Competition Commission of India

Published On Aug 24, 2021 01:42 PM By Rohit

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The commission found Maruti indulging in unfair competitive practices, leading to a probe that was initiated in 2019

India’s largest carmaker, Maruti Suzuki, has come under the scanner of the Competition Commission of India (CCI) for carrying out unfair competitive practices. The CCI has now charged the carmaker Rs 200 crore for dissuading dealers from offering discounts to customers beyond prescribed limits set by Maruti.

Maruti also seems to have warned its dealers of strict action including stoppage of supply and penalty for offering additional discounts. Back in 2019, the CCI had commenced a probe into the matter to stop the manufacturer from engaging in such unhealthy competitive behaviour.

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Here’s what one Maruti spokesperson had to say about the incident:

We have seen the order dated 23 August 2021 published by the Competition Commission of India. We are examining the order and will take appropriate  actions under law.  MSIL has always worked in the best interests of consumers and will continue to do so in the future.”

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Maruti also added that it had never imposed a discount control policy on its dealers and it was always up to the dealers to offer as many benefits as they wished to customers. However, CCI’s order included as proof several email exchanges between Maruti and its dealers which proved that such control was exercised by the carmaker.

While the probe and the subsequent fine is based on strong evidence, it is surprising as Maruti has been one of the carmakers regularly offering generous discounts on its cars, on both Arena and NEXA lineups, for a long time now. It also regularly introduces additional benefits to customers during festive seasons.

The discount control policy (also known as resale price maintenance) has long been silently enforced by carmakers to prevent price wars among themselves. However, it, quite understandably so, is prohibited by Indian law as it has an adverse effect on competition.

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